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Auto sales top 14.4 million in 2012: VW, BMW, Honda see strong December results

January 2, 2013

Sales of the Volkswagen Passat totaled 117,023 in 2012, more than four times the number of Passats sold in 2011.

U.S. light-vehicle sales--led by Volkswagen, BMW and Honda--jumped 9 percent in December, pushing the seasonally adjusted sales rate above 15.3 million for the second consecutive month and helping the industry finish 2012 on a high note.

Automakers sold 14.49 million light vehicles in the U.S. market last year, up 13 percent from 2011, for the highest mark since 2007. It was the third-straight annual gain of at least 10 percent, the first such industry streak since 1973.

Automakers and analysts expect U.S. sales to continue rebounding in 2013, albeit at at a slower pace, with some forecasts as high as 15.6 million light vehicles.

"If you want to hang your hat on something that's really improved in our industry, it's the North American auto business," said George Magliano, senior principal economist for IHS Automotive in New York. "It's a shining piece of U.S. manufacturing."

Chrysler, which analysts had predicted would lose market share in 2012, increased annual sales more than any major automaker other than Toyota and Honda, automakers that rebounded sharply from the 2011 earthquake in Japan.

General Motors' sales rose 5 percent last month and 4 percent for all of 2012. Buick and Cadillac led the December gains, with advances of 5 percent and 12 percent, respectively. Chevrolet deliveries were up 4 percent.

GM cited strong retail demand and higher deliveries of cars, crossovers and pickup trucks for the company's December results.

For all of 2012, Chrysler's U.S. sales increased 21 percent to 1.65 million.

It was the 33rd straight month Chrysler has posted an increase in U.S. sales as the automaker heads toward its third consecutive year of market-share gains. Chrysler's share of U.S. sales stood at 11.4 percent through November, up from 10.7 percent during the same period of 2011.

Hyundai's U.S. sales rose 17 percent in December and gained 9 percent in 2012, CEO John Krafcik said Hyundai sold 59,435 vehicles last month and a record-setting 703,007 units last year.

At Nissan Motor Co., December sales slipped 2 percent, with volume at the Nissan brand down 4 percent and Infiniti up 15 percent. For all of 2012, Nissan Motor's U.S. sales rose 10 percent, with the Nissan brand setting a sales record of 1.02 million.

Kia Motors' U.S. sales declined--for the first time in more than two years--by 10 percent last month to 39,178 vehicles. The automaker's previous monthly drop was in August 2010, when industry-wide sales results were skewed by numbers inflated a year earlier by the U.S. government's Cash for Clunkers vehicle scrappage program.

Despite the dip last month, Kia sold a record 557,599 vehicles in the U.S. market in 2012, a 15 percent increase over last year.

"People are much more confident about jobs; banks and other credit institutions are much more willing to lend," Mustafa Mohatarem, GM's chief economist, said Thursday. "You're seeing the customer continue to come back into the marketplace."

Jesse Toprak, chief market analyst for TrueCar, said the latest car and truck models, often equipped with more features, are also compelling U.S. consumers to consider a new-vehicle purchase.

Healthy streak

U.S. consumers continue to replace cars and trucks that are, on average, the oldest ever on America's roads. The average age of vehicles on U.S. roads is about 11 years, according to researchers at Experian Automotive and R.L. Polk & Co.

"It sure feels a lot better to be selling cars today than a few years ago," Geoffrey Pohanka, president of the Pohanka Automotive Group, told Bloomberg. "The age of the fleet and the attractiveness of a lot of cars that are being designed now are going to help sustain sales going forward."

Pohanka's Washington, D.C.-area dealer group is expanding only a few years after retrenchment. Pohanka closed three Saturn stores and a Chrysler-Dodge dealership as part of the 2009 restructuring of General Motors and Chrysler Group. In 2013, he plans to build a second Honda store in as many years and also will add a new VW dealership.

Sales are also being driven by a steady, though sometimes choppy, economic recovery, despite high unemployment.

"The budget compromise reached in Washington this week removes uncertainty and clears the way for full-year light vehicle sales to rise to the 15 million to 15.5 million unit range in 2013," Kurt McNeil, head of U.S. sales operations for GM, said in a statement.

But Ellen Hughes-Cromwick, chief economist for Ford, said Thursday the automaker planned to gauge the impact of higher U.S. payrolls taxes and "how consumers are going to substitute and economize on certain purchases."

GM, Ford, Hyundai-Kia and Nissan lost U.S. market share in 2012, while Toyota, Chrysler, Honda and the Volkswagen Group gained share.

Sandy demand

Lingering replacement demand from owners of damaged vehicles and purchases deferred by superstorm Sandy on the East Coast may have boosted vehicle sales by about 50,000 in December, Credit Suisse Group AG estimated in a report late last month.

TrueCar.com estimates industry incentives averaged $2,409 per model in December, up 4.3 percent from November but down 9 percent from December 2011.

GM, the top-selling automaker in the U.S., boosted incentives on its trucks last month after warning it may end the year with more Chevrolet Silverados and GMC Sierras than it planned. At the end of December, GM had 221,649 full-size pickups on hand, almost reaching its year-end target of 200,000 to 220,000. Deliveries of the Chevrolet Silverado rose 6.1 percent to 50,699 in December.

In December, Porsche's U.S. sales rose 61 percent. For all of 2012, sales rose 21 percent to a record 35,043 vehicles, topping Porsche's previous peak of 34,693 in 2007.

Porsche executives are looking for another increase in 2013 as the manufacturer moves toward its goal of selling 50,000 vehicles in the United States by 2018.

"We hope to solidify our position as the world's strongest Porsche market," Detlev von Platen, CEO of Porsche Cars North America Inc., said in a statement. "We look forward to the introduction of several new products in 2013, including the Cayenne Turbo S and Cayman this spring."